By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- A big week of earnings with 150 members of the S&P 500 on tap to report. Headliners include tech giants Meta, Alphabet, and Microsoft as well as representatives from the pharmaceutical and oil sectors. To date, 78% of the S&P 500 companies that have reported this quarter have reported positive surprises and analysts are cautiously optimistic for this earnings season.
- The Federal Open Market Committee ends a two-day meeting on Wednesday and is widely expected to increase rates another 25 basis points with the target fed funds rate increasing a range of 5.25% to 5.50%. While inflation has eased, it remains above the Fed’s target and Fed officials have been consistent on the need to continue to raise rates.
- The personal consumption expenditures (PCE) deflator is out on Friday and represents the Fed’s favored inflation measure. It is expected to increase 0.2% month-over-month with core PCE also expected to increase 0.2%. That would put the year-over-year changes at 3% and 4.2%, respectively.
Three Things to Know
- The Dow Jones Industrial Average has been up 10 consecutive days (through Friday, July 21), the longest winning streak since 2017. (Source: CNBC)
- On July 24, the NASDAQ 100 will undergo a special rebalance, which is meant to curb the high concentration in the index of a handful of tech stocks. The weight of the seven largest stocks in the index will be reduced by 12 percentage points (from 56% to 44%). The top 10 NASDAQ stocks currently represent 62% of the entire index. (Source: The Kobeissi Letter)
- The index of 10 leading economic indicators has been negative for 15 consecutive months. This last happened during the Global Financial Crisis. (Source: Haver)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.